Fleet News

Going by bike could cost you more in tax

MOTORISTS who heed the Government's calls to 'go green' could end up paying more tax for the privilege of forsaking four wheels in favour of two. The growing number of employees opting to conduct company business by bicycle rather than car could face higher tax bills by resorting to pedal power.

Under the Fixed Profit Car Scheme, motorists driving a typical 1.4-litre vehicle can be reimbursed to the tune of 35p per mile for business mileage without paying any extra tax. The figure for cyclists is a meagre 6.2p per mile, but some employers pay significantly more in order to offer a worthwhile incentive. Environmentally-minded Edinburgh City Council pays cyclists 25.4p per mile and offers employees assisted loans to buy bicycles.

An Inland Revenue spokeswoman said: 'The figure we use is 6.2p per mile - anything over that, as far as we are concerned, is liable to tax and it is up to the local tax office to enforce its collection. As far as we are aware, there are no plans to review the situation'.

As reported last week, Cambridge MP Anne Campbell is lobbying the Government to introduce a cycling allowance for MPs, which at 5p a mile, would fall under the taxation threshold, but offer little real incentive to cycle. Campbell said her campaign to secure cycling mileage reimbursements had attracted a great deal of interest, with many people calling for much higher rates than she was suggesting.

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